What is Binance exchange? Explained in detail for beginners by

What is the Binance exchange?

Established in 2017, Binance is a prominent cryptocurrency exchange renowned for its emphasis on altcoin trading. With over 350 cryptocurrencies and virtual tokens, including BTC, ETH, LTC, DOGE, and its proprietary coin BNB, Binance facilitates crypto-to-crypto trading.

Main points to remember:

• Binance is a digital platform allowing cryptocurrency trading, featuring numerous popular cryptocurrencies.
•  It furnishes users with a crypto wallet for secure storage of their digital assets.
• The exchange offers additional services such as earning interest on holdings, cryptocurrency transactions, mining programs, and investment guidance.
• Binance has its native token, BNB, based on blockchain technology.
• While Binance operates globally, it faces restrictions in certain countries like the U.S. and U.K. due to regulatory reasons.

The evolution of Binance exchange

Binance was founded in 2017 by Changpeng Zhao, a prominent entrepreneur, investor, and software engineer. Launched in July, the exchange quickly rose to prominence, becoming one of the largest in the world within just six months.

Renowned for its crypto-to-crypto trading services, Binance boasts among the lowest transaction fees in the cryptocurrency market. It also provides high liquidity and extends discounts to users who utilize its native cryptocurrency token, BNB.

Backed by robust safety measures and employing multi-tier and multi-clustered architecture, Binance ensures high processing throughput, maintaining stringent standards of security.

In 2019, regulatory concerns led to the global Binance exchange being prohibited in the U.S. Consequently, Binance.US was established to comply with U.S. regulations and serve American customers.

Binance trading overview

Binance, much like other cryptocurrency exchanges, offers a range of services including trading, listing, fundraising, and withdrawals for various cryptocurrencies. It serves as a platform for launching initial coin offerings (ICOs) and is utilized by millions for cryptocurrency exchange and investment.

To initiate trading on Binance, users need to fulfill the know-your-customer (KYC) requirements. Once their trading account is set up, they can deposit funds into their provided public wallet address to begin trading.

The exchange supports four primary types of trade orders: limit, market, stop-limit, and one-cancels-the-other (OCO) orders. Limit orders execute trades at a specified price set by the trader, while market orders execute immediately at the prevailing market price. Stop-limit orders trigger trades when the price reaches a predetermined level, and OCO orders involve a pair of orders where one cancels the other upon execution.

Binance provides seven varieties of orders for cryptocurrency derivatives, particularly futures contracts. These orders encompass:

• Stop-Limit Order Limit Order
• Market Order
• Limit Order
• Stop Market Order
• Trailing Stop Order
• Post Only Order
• Limit TP/SL Order (Strategy Order)

There are no fees for depositing cryptocurrencies or funds. However, withdrawals incur transaction fees, the amount of which varies based on the cryptocurrency and transaction size.

Alternative binance offerings

Smart pool

Binance Smart Pool allows miners to switch between different cryptocurrencies for mining to optimize their income. Binance Pay enables cryptocurrency usage for global purchases without any fees, applicable on Binance's Marketplace.

Earning

Binance Earn is a platform where users can stake or generate interest by depositing stablecoins with the exchange. Depending on the coin and duration, investors have various options and interest rates offered by the exchange.

Lending

Binance Card is a Visa credit card that enables users to convert their cryptocurrency into fiat currency for spending on goods and services. While conversion doesn't involve administrative fees, third-party charges, such as payment network fees, apply.

Development

Binance operates Binance Labs, a blockchain technology incubator focusing on supporting promising pre-ICO stage projects. It provides funding, advisory resources, and a launchpad for listing and fundraising efforts.

Additionally, Binance offers LaunchPad for hosting emerging blockchain projects and API interfaces. As of July 2023, over 70 projects have been launched through this platform.

Binance Coin (BNB)

Binance Coin (BNB) serves as a utility token for facilitating cryptocurrency trading activities on the Binance exchange. It was introduced through an initial coin offering (ICO) in July 2017, with Binance distributing 20 million BNB tokens to angel investors, allocating 80 million tokens to the founding team, and releasing the remaining 100 million tokens to participants through the ICO.

Nearly half of the funds generated from the ICO were designated for Binance's branding and marketing efforts, while approximately one-third were allocated for developing the Binance platform and implementing necessary enhancements to its ecosystem.

Initially, Binance Coin operated on the Ethereum blockchain utilizing the ERC 20 standard. However, in 2019, it transitioned to become the native coin of the BNB Chain.

As of July 2023, BNB holds a value of approximately $250 and ranks as the fourth most valuable token in the blockchain space, boasting a market capitalization of around $39 billion.

Is Binance trustworthy?

Millions of users rely on Binance as a trusted platform for conducting cryptocurrency transactions. However, like any third-party entity operating within the blockchain and cryptocurrency realm, it remains susceptible to hacking incidents. This vulnerability was evident in 2022 when hackers managed to steal $570 million worth of BNB.

Is Binance accessible to residents of the United States?

American citizens have the option to utilize Binance.US, ensuring they are safeguarded by U.S. regulations. However, accessing Binance's global platform from the U.S. or other restricted nations using methods such as a virtual private network (VPN) goes against Binance's Terms of Use.

Is Binance superior to Coinbase?

Regarding whether Binance is superior to Coinbase, it's not a matter of one being inherently better than the other. Coinbase is generally considered more user-friendly for beginners, whereas Binance might be perceived as slightly more complex. Ultimately, the choice between them boils down to personal preference.